Greeks Are Panic-Buying Food And Pulling $1 Billion A Day Out Of Banks

Greeks pulled their cash out of the banks and stocked up with
food ahead of a cliffhanger election on Sunday that many fear
will result in the country being forced out of the euro.

Bankers said up to 800 million euros ($1 billion) were leaving
major banks daily and retailers said some of the money was being
used to buy pasta and canned goods, as fears of returning to the
drachma were fanned by rumors that a radical leftist leader may
win the election.

The last published opinion polls showed the conservative New
Democracy party, which backs the 130 billion euro ($160 billion)
bailout that is keeping Greece afloat, running neck and neck with
the leftist SYRIZA party, which wants to cancel the rescue deal.

As the election approaches, publishing polls is now legally
banned and in the ensuing information vacuum, party officials
have been leaking contradictory "secret polls".

On Tuesday, one rumor making the rounds was that SYRIZA was
leading by a wide margin.

"This is nonsense," one reputable Greek pollster said on
condition of anonymity. "Our polls show the picture has not
changed much since the last polls were published. Parties may be
leaking these numbers on purpose to boost their standing."

The pollster said there was some consolidation, with voters
turning to New Democracy and SYRIZA from smaller parties but the
pool of undecided voters remained unusually large so close to the
election and the result was impossible to predict.

Both parties say they want Greece to remain in the single
currency but SYRIZA has pledged to scrap the bailout agreement
signed in March which has imposed some of the toughest austerity
measures seen in Europe in decades.

The European Union and International Monetary Fund have warned
that Greece, which has only enough cash to last for a few weeks,
must stick to the conditions of the bailout deal or risk seeing
funds cut off.

EURO OR DRACHMA DILEMMA

New Democracy has been telling voters they must choose between
the euro or the drachma, while SYRIZA promises to end the
austerity measures imposed by Greece's international lenders,
such as salary and pension cuts, that have driven many Greeks
into abject poverty.

Fears that Greece will collapse financially and leave the euro
have slowly drained Greek banks over the last two years. Central
bank figures show that deposits shrank by about 17 percent, or
35.4 billion euros ($44.4 billion) in 2011 and stood 165.9
billion euros ($208.1 billion) at end-April.

Bankers said the pace was picking up ahead of the vote, with
combined daily deposit outflows from the major banks at 500-800
million euros ($625 million to $1 billion) over the past few
days, and 10-30 million euros ($12-36 million) at smaller banks.

"This includes cash withdrawals, wire transfers and investments
into money market funds, German Bunds, U.S. Treasuries and EIB
bonds," said one banker, who spoke on condition of anonymity.

Retailers said consumers were stocking up on non-perishable food
while almost all other goods were seeing a huge drop in sales as
cash-strapped Greeks have no money to spare in the country's
fifth year of recession.

"People are terrified by the prospect of returning to the drachma
and some believe it's good to fill their cupboard with food
products," said Vassilis Korkidis, head of the ESEE retail
federation.

"It's over the top, we must not panic. Filling the cupboard with
food doesn't mean we will escape the crisis," he said.